Madmen is, in many ways, a clear articulation of many of the ideas I’ve come to hold about social change. It details how Public Choice Theory reveals that governments have all the wrong incentives for positive change. It discusses the role of ideas, and how they are able to overcome the vested interests that Public Choice makes seem so insurmountable. It lays out Hayek’s description of social change coming from intellectuals, and spreading through the general public. But Madmen adds a new dimension, one I have not been able to integrate into my worldview until recently: the bottom-up role of culture, and the circumstance of time and place.

Isaac goes on to highlight the emergence of cultural norms by people sharing tacit knowledge, and he compares this aspect of Madmen with the work of economist Peter Leeson. While undesigned and unintentional, these bottom-up forces help to shape social rules, which in turn shape people’s incentives and therefore outcomes. Isaac’s review emphasizes the book’s theme that beneficial change is given its best chance in a society that allows a free flow of ideas, and where people in such societies engage in ideas at all levels. His overall impression is a good one:

The book opens with a story of the shot-clock that saved basketball, and closes with a story of hybrid wheat that saved millions of lives. It is full of examples of social change, both good and bad, and the authors’ thoughts on why it happened when and how it did. If you are interested in how the world works from a ten thousand foot vantage point, I cannot recommend Madmen, Intellectuals, and Academic Scribblers enough.

The next review is by my former colleague, economics professor Matt Holian, whose take on Madmen is more granular. Matt emphasizes the scholarly contributions of our framework (Chapter 5), the four case studies of political change (Chapter 6), and especially our overall theme, which is that ideas have consequences only when political entrepreneurs make it happen. Matt also draws attention to some of the fun details sprinkled throughout Madmen‘s pages.

The book is a contribution to the scholarly literature, and arguably its main contribution is to create a framework with a central role for what they term “political entrepreneurs.” These are individuals whose actions are central for bringing about policy change…

…[I]n addition to applying and organizing some very deep ideas, this book is also packed full of interesting anecdotes and neat tidbits; students, professional economists and educated lay audiences will all learn new things and will remain entertained throughout. Some of the fun facts I took away from this book include that Larry Summers, former top advisor to President Obama, is Paul Samuelson’s (the second economist to win the Nobel prize in economics) nephew. Nor did I know that Ronald Coase got the idea to auction off rights from a University of Chicago law school student. The name of the boat that stranded the castaways in the 1960s television sitcom Gilligan’s Island, the S.S. Minnow, was chosen because the then FCC chairman Newt Minow had spoken harshly about the television industry. And on and on.

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From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.189, ch.7)

The most successful entrepreneurs know what they do well, they know the market and the opportunities within it, and they choose those activities that create the most value. This is true in economic as well as political markets.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.178, ch.7)

[W]hen the right elements come together at the right time and place and overwhelm the status quo, it is because special people make it happen. We call them political entrepreneurs.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.176. ch.7)

While we started this book with Danny Biasone saving basketball, we end it with Norman Borlaug saving a billion lives. These stories are not that different. Both faced vested interests, which were reinforced by popular beliefs that things should be a certain way—that is, until a better idea came along.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.174, ch.6)

Because there was a general belief that homeownership was a good thing, politicians found the public with open arms.... Everybody was winning—except Alfred Marshall, whose supply and demand curves were difficult to see through the haze of excitement at the time, and except Friedrich Hayek, whose competition as a discovery procedure was befuddled... In short, once politicians started getting credit for homeownership rates, the housing market was doomed.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.166, ch.6)

Everyone responded rationally to the incentives before them. In short, the rules that guided homeownership changed over time, which in turn changed the incentives of these actors. And bad things happened.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.153, ch.6)

They understood the economics. The ideas had already won in ... the regulatory agency itself. All that remained to be overcome were some vested interests and a handful of madmen in authority.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.146, ch.6)

If the idea for auctions of spectrum use rights had been part of the public debate since at least 1959, why didn’t the relevant institutions change sooner? What interests stood in the way?

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.121, ch.5)

When an academic scribbler comes up with a new idea, it has to resonate well with widely shared beliefs, which in turn must overcome the vested interests at the table. Many forces come together to explain political change, even though it may seem like coincidence of time and place.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.120, ch.5)

It’s the rules of the political game that deserve our focus, not politicians’ personalities or party affiliations.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.119, ch.5)

In short, ideas are a type of higher-order capital in society. Like a society that is poor in capital and therefore produces little consumer value, a society that is poor in ideas and institutions will have bad incentives and therefore few of the desirable outcomes that people want.